Without any background information about your finances and those of your spouse, nobody should hazard a guess at what is fair and reasonable to expect. Solicitors do not like to be wrong, so you would think that they would swerve that question until they had looked at the evidence: after all, isn’t that what lawyers are supposed to do? Nobody watches a TV lawyer suddenly announce “Stop the trial! We have just discovered some conjecture!” Entertainment shows often bear little relation to the real day-to-day (and often pedestrian) activities of lawyers, doctors and the emergency services. Holby City and Casualty would never have topped the ratings if the paramedics spent all their time either in traffic or queuing for hours at the hospital and a solicitor calmly asking about a their client’s spouses bank accounts and getting a credible answer backed by disclosure of bank statements is the norm. That is not to say that case-changing evidence cannot arise during a prolonged hearing, but people should not expect rabbits emerging from hats or the assistant disappearing, glamourous or not. For most people, their divorce finance discussions will be a process managed by the solicitor and carried out without flashing lights and thunder-flashes.
Will a lawyer tell me what can I expect to get?
A complete refusal to be drawn on what somebody can expect is hardly helpful, so what a good lawyer should do is to go through the various types of resources and explain the broad legal principles. By doing that, some increase in reasonable expectation should result. Sometimes even a broad approach will be helpful.
What people have that can be looked at and evidenced can be broken down into three main areas:
- Income
- Capital
- Pensions
If people can compartmentalise those to start with, they will think about the issues before bringing the ideas and assets into a thought out package, usually with some aspects more easy to agree than others.
Will I get maintenance?
This is a two-part question at the very least and depends on ‘income issues’ and ‘child support’.
Income issues are about attempting to provide both people with enough to meet their basic needs on a monthly basis. There is no legal principle as to sharing incomes on divorce, but if there are children to consider, then the starting point is what the government’s CMS formula says should be paid. Unlike every other consideration, the formula has not logic to it and is completely disconnected from need: a person with an income of £100,000 per year, is still entitled to the formula amount, even if their former spouse only earns £10,000. There are ways to bring some fairness into such a situation, with other adjustments based on need, but child support is payable to a person already earning far more than the payer.
That brings it back to being an income issue – if living arrangements for a child are agreed, then the formula can be used and a weekly/monthly payment worked out before looking at what consequences flow from that income transfer.
When looking at what is available to meet reasonable basic needs, the movement of child support between parents puts more money in one pot and less in the other. In the case of a lower-earner paying child support to a higher earner, that might leave them too short of money to meet their monthly bills and the higher earner with more than they need. It might be sensible to agree spousal support from the higher earner or adjusting some other part of the arrangement to reduce the needs of the lower earner such as getting more of the other assets so as to have a lower mortgage or avoid paying rent. Solutions can be found and every day they are being looked for by constructively-minded family lawyers.
The entire basis of spousal support (‘maintenance’) is to help somebody meet needs for a rehabilitative period during which they are expected to become financially independent.
Do we have to share everything 50/50?
Back in 2001, millionaires shuddered when the courts decided that fairness should be ‘measured against the yardstick of equality’. For a while, people thought that 50/50 could rarely be departed from and many divorces were settled close to 50/50. Even back then, it was not simply a calculation of working out what they had, dividing it in two and having the wealthier person pay a lump sum to the other to equalise their pot of resources, but that was not unusual. Prior to that landmark decision (White v White) the very rich could say – ‘Work out what you actually need and I will pay it’ – without their general level of finances being disclosed and considered. Some people with ‘stellar’ abilities still escaped sharing, but from then on, need has only been one of the factors in deciding fairness.
The sharing is very often not 50/50, but that is the starting point up to the point where all reasonable needs have been met – after that, other factors can come into play. For most people, the assets are not greater than their needs, so sharing at 50/50 is the regular starting point.
Who gets the house in a divorce?
This is often the biggest issue for people splitting up and there is no one-size-fits-all solution to what is right.
A house can be looked at in two ways: it is a building that has been a home and meets practical needs and it is also a lot of money tied up and not available for other purposes.
Sometimes the emotional attachment to a particular home makes it very difficult for somebody to think about the money tied up in it. People will start off either feeling attachment for that particular building or not and sometimes both people are equally adamant that they ‘need’ that property. Sometimes that determination to retain a property is simply impractical or unreasonable, but that can be very difficult for them to accept.
Keeping a particular property after splitting up might be justified and sometimes judges will allow a bit of leeway as to the numbers if that means that a property can remain in use and benefits the parties or the children. Having the use of a property might be for a particular time and it be expected that it will later be sold or one person buys out the other. It is even possible for people to agree to transfer it to another family member e.g. an adult child, rather than argue about who gets it.
It is more likely that a person using a property to provide a home for children, even adult children, will get priority, but only if that can be made fair in the whole package of terms. There is no automatic principle that a parent with the children more of the time gets the home as a result. They might do and it might be a good solution, but it is only one option.
I paid for the house – surely I can keep it?
Assets such as a house are not seen in isolation from the pool of resources that is available to meet the needs of both spouses. That means that bringing in an asset does not create a right to get it back if you split up. The funding of a property – bringing in wealth does not mean that the person automatically gets more. In a short marriage, especially one without children, it is more likely that the origin of assets will be looked at, but if an asset is needed to be used to ensure that needs are met, the origin will be less important than meeting needs.
Can I keep my inheritance?
As with a house, there are times when it is fair to ring-fence an inheritance and in other circumstances to share it. It depends in part of the timing, whether the money got mixed in with general funds and sometimes the proportion of the couple’s wealth that it would represent. Somebody who has say 15% of the family pot as an inheritance, has always kept it in a separate account and the practical needs of the other person would be met by sharing the other 85% would have a convincing argument, but it would still decide on what a judge thought was fair in all the circumstances. An inheritance received after separation would not have been part of the family’s resources during the effective marriage and again the beneficiary could have arguments to keep it.
Do I have to share my pension on divorce?
Pensions can be contributory – where people actively sacrifice earnings to build up a retirement fund, or non-contributory where service is rewarded by the employer funding the benefits. Those benefits can be ‘defined’ making a non-contributory scheme ‘defined benefit’ [DB] and when people have contributed – it being called a ‘defined contribution’ [DC] scheme. A DC scheme has a fund value so can be seen to be an ‘asset’, yet DB schemes are often on better terms than people often contribute and so when looking at pensions, a DB scheme has an unknown value – although some schemes give an idea of the possible value in their annual statements. That value is not necessarily comparable with the fund value of a DC scheme so an expert is needed to explain and compare.
Both ways of providing for retirement create valuable rights and often the rights are worth more than the equity in the family home. Ignoring pensions when splitting up is like sharing what is on the table but not looking in the pantry or the freezer. Ignoring pensions has often been urged by the better provided for person ever since they became capable of being shared. It is tantamount to asking the person to ignore your savings, just because they have been locked into long-term investments.
Once the value of a pension is known, it need not be directly shared through a pension sharing order (only available from Decree Absolute/Final Order of Divorce) but it needs to be considered part of the pool of assets.
What will I get on divorce?
- Income – through spousal support (if needed and affordable) and Child Support based on a formula
- Capital – a sharing of all the known assets including money tied up in the family home
- Pension – either by a pension sharing order on divorce or by ‘offsetting’ against other assets
- The end of matrimonial rights through marriage and the freedom to remarry, should you so wish
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